UnitedHealth expects lower earnings with Medicare Advantage competition
UnitedHealth Group projected it will increase its earnings by 5 percent next year while adding up to 4 million new members--both of which come below Wall Street analysts' expectations.
The insurer said in a regulatory filing it expects to earn $5.25 to $5.50 per share in 2013 and report $123 billion to $124 billion in revenue. However, analysts had projected $5.58 a share, Bloomberg reported.
UnitedHealth CEO Stephen Hemsley said the lower projections are largely because the company anticipates greater competition within the Medicare Advantage market, as well as shrinking revenue from other government programs. Plus, a continued "weak business climate" likely will contribute to slower jobs growth and businesses that are hesitant to offer health coverage to their employees, according to the Minneapolis Star Tribune.
Meanwhile, UnitedHealth execs said they anticipate recruiting 3.5 million to 4 million new members next year, which is a slower growth rate than the 6 percent membership increase they expect this year. That's primarily because the execs believe fully-insured commercial members will decline, reported Reuters.
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